Institutionalizing the Financial Stability Coordination Council

July 6, 2021

EXECUTIVE ORDER NO. 144

INSTITUTIONALIZING THE FINANCIAL STABILITY COORDINATION COUNCIL

WHEREAS, financial authorities have learned from the Global Financial Crisis of 2007-2009 that financial stability is a distinct and over-arching policy objective that sustains the health of the entire financial system;

WHEREAS, driven by their mutual interest for a well-functioning and resilient financial system, the Bangko Sentral ng Pilipinas (BSP), Department of Finance (DOF), Securities and Exchange Commission (SEC), Insurance Commission (IC) and the Philippine Deposit Insurance Corporation (PDIC), voluntarily convened in October 2011 to pursue financial stability;

WHEREAS, on 29 January 2014, the BSP, DOF, SEC, IC and PDIC signed a Memorandum of Agreement to create the Financial Stability Coordination Council as a voluntary inter-agency body which shall collaborate and cooperate to pursue, sustain and enhance the health of the financial system under the objective of financial stability;

WHEREAS, under Republic Act (RA) No. 7653, otherwise known as "The New Central Bank Act," as amended by RA No. 11211, the BSP is mandated to promote financial stability and is directed to closely work with the National Government, including, but not limited to the DOF, SEC, IC and PDIC; and

WHEREAS, in recognition of the importance of financial stability to the overall health of the country's financial system, there is a need to formalize the creation of an inter-agency body on financial stability in order to institutionalize its powers and functions, and strengthen the ability of the Government to collectively address systemic risks, which may arise in different segments of the financial market;

NOW, THEREFORE, I, RODRIGO ROA DUTERTE, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and existing laws, do hereby order:

SECTION 1. Policy of Financial Stability. — Consistent with the objective of the National Government to safeguard the welfare of Filipinos through a well-functioning financial system, the government hereby reiterates its policy of enhancing the stability of the financial system by mitigating systemic risks through timely policy interventions.

SECTION 2. Institutionalizing the Financial Stability Coordination Council. — The Financial Stability Coordination Council (FSCC) is hereby institutionalized as an inter-agency council composed of the BSP, DOF, SEC, IC and PDIC, as its member agencies.

SECTION 3. Purpose and Objectives. — The FSCC shall enhance the stability of the financial system by mitigating systemic risks through timely macroprudential policy interventions. Towards this end, the FSCC shall formulate a Macroprudential Policy Strategy Framework, which shall guide its policy interventions. The Macroprudential Policy Strategy Framework shall be made publicly available and shall be updated periodically, as may be warranted.

SECTION 4. Powers and Functions of the FSCC. — To the extent consistent with the respective mandates of the member agencies, the FSCC shall have the following powers and functions:

a. Issue directives or policy regulations in the pursuit of its objective of financial stability;

b. Align various policies, regulations, supervisory frameworks, programs and initiatives on financial stability;

c. Coordinate with foreign regulators on financial stability and macroprudential policy;

d. Collaborate with public and private organizations for data collection and research to facilitate informed policy recommendations; and

e. Formulate and adopt its governance and operational guidelines, as may be necessary.

SECTION 5. Executive Committee (ExeComm). — The affairs of the FSCC shall be governed by an ExeComm which shall be composed of:

a. The BSP Governor — Chairperson;

b. The Secretary of Finance — Member;

c. The Insurance Commissioner — Member;

d. The President of the PDIC — Member;

e. The SEC Chairman — Member;

f. One senior official from each of the five (5) member agencies, as formally designated by the head of the agency, shall serve as non-voting members.

The ExeComm shall promulgate rules for the conduct of its internal procedures, issue Resolutions relating to the implementation of its functions, and create Technical Working Groups and/or Sub-Committees, as necessary.

The National Treasurer may be invited to the meetings of the ExeComm as a special non-voting member.

SECTION 6. FSCC Secretariat. — In performing its purpose and objectives, the FSCC and its ExeComm shall be assisted by a Secretariat. Unless the FSCC declares otherwise, the Office of Systemic Risk Management of the BSP shall serve as the Technical Secretariat to the FSCC.

SECTION 7. Meetings. — The FSCC ExeComm shall meet periodically, without prejudice to the discretion of the Chairperson to call meetings, as may be necessary.

SECTION 8. Funding. — The funding requirements for the operation of the FSCC shall be charged against the budget of the BSP.

SECTION 9. Repeal. — All other issuances, orders, rules and regulations inconsistent with this Order are hereby repealed or modified accordingly.

SECTION 10. Separability. — If any provision of this Order is declared invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be in full force and effect.

SECTION 11. Effectivity. — This Order shall take effect immediately.

DONE in the City of Manila, this 6th day of July, in the year of Our Lord, Two Thousand and Twenty-One.

 

Published in the Official Gazette, Vol. 117, No. 29, p. 7383 on July 19, 2021.